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ProShares UltraShort FTSE China 50 Message Board

  • bernardy4416 bernardy4416 Feb 25, 2010 10:04 AM Flag

    Bashercatcher

    Hi bashercatcher,

    what would be your advice on FXP currently? Should one hold in the hope of potential gains, or take profit?

    Disclosure : Long FXP at $9.11 (excluding trading costs).

    My take on China is short term bearish. Although I think the long-term growth story is sound; China may have advanced too far ahead of fundamentals, with both the stock market and property sector looking forthy.

    I am familiar with how these leveraged ETFs function with regards to the "decay" issue.

    I understand that the final decision to buy, hold or sell rests firmly on my shoulders. However, any insight you may offer will be greatly appreciated.

    Thanks in advance.

    Bernard

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    • Noway going back 10,000 soon.

    • Hi basher,

      thanks for the TA!

      Yeah, sure looks like the market's in an upbeat mood. Agreed that it could run for some time still, perhaps even test the January highs. That is, unless something major happens.

      Good trading :)


      Bernard

    • Bernard,
      While all the technicals said "straight down" 6 weeks ago, apparently the market changed its mind and is trading like we're in a full recovery; RSI strong, higher volume on up days, MACD positive, etc.


      IMHO, it'll last 3-5 months until the market decides that the recovery isn't sustainable without gov't stimulus.

    • Hi swe8688,

      apologies for the late reply....time zone difference.

      Nah, don't intend to average down on this one. Just hanging around to see how it all plays out :)

      From a day-trading point, buk and yourself seem to have a good handle on things. What's your take on things so far?

      Regards.

      Bernard

    • Hey Bernard,

      Wondering if you still holding those FXP 9.11 or already average down at this point?

    • I don't think he's suggesting economic collapse, just that inflated RE asset prices will come down and/or inflation was increase dramatically.
      The parallels to Japan are noteworth IMHO.

      The worst prognostication i saw was he said stagflation may occur, i.e., inflation in excess of GDP growth.

      What did you read that said he is suggesting "economic collapse"??



      PS- Did you read about the most recent action by the PBoC?
      They recognize the RE bubble, overcapacity and wasted spending.

    • Hi basher,

      there are articles going to as recent as Feb 2010.

      Andy Xie presents his case very well, and his understanding of China is good. However, I cannot help but feel that his views are a little too negative. I must reiterate that I don't think a massive collapse in China is probable.

      Don't know about Uncle Ben. He seems convinced that the solution to all our problems is to print more money. Who knows how long he is going to keep this up?


      Bernard

    • Xie said 2h of 2010 in an interview i watched.

      I didn't see anything "very recent".
      Are you aware of any?

      He said the bubble would bust but deflation was never mentioned, just stagflation or hyperinflation?


      Seems to me the market has priced in none of the above,
      JMHO

      After watching and reading Xie, i'll continue to watch the dollar to portend the collapse the china bubble and bonds to see when BB may be forced to raise rates.
      Obviously, raising rates would cause the dollar to rise.

      Have you figured out where all the demand is going to come from to keep the game going?
      TIA

    • Hi basher,

      it's no secret that there has been a drastic rise in property prices in Hong Kong and major Chinese cities. I'm not familiar with Goldman's activity in Asian property, but it seems prudent to take some money off the table when prices have gone up that much.

      I don't remember Andy Xie saying H2 2010. I rather think it was 2012 in one of his articles. Anyway, I'm not really a believer of market forecasting, always lost money that way in the past :)

      What I do believe, is that this global "recovery" has been manufactured by easy money rather than a virtuous cycle. Governments are printing massive amounts of money in an attempt to solve a problem that was caused by excessive credit in the first place. Print enough money, and the stock market (among other things) will rise. How sustainable is that? All they have done is kick the can down the road, but they're just compounding the bill that will have to be paid eventually. Somewhere down the line, Mr. Market is going to protest. I'm guessing that's the reason you're watching bond prices.

      Perhaps the low volumes are also a sign that the market lacks conviction in the recovery.

      Now, I've no idea when a correction will come, and what's going to trigger it. Maybe this market will run back up to pre-crisis levels, I don't know. When it comes it's probably going to affect markets globally.

      Personally, I think China's got a bright future ahead of it. I intend to go long China and Asia (ex-Japan) eventually, but not at this current point in time.

      But, hey, what do I know? Like you said we're just two retail investors trying to figure out where the smart will go next. Perhaps this rally will exceed all previous highs before we see any hint of a pull-back.


      Bernard

    • very interesting-
      Thanks

      What i gleaned-
      1) a rise of the minimum wage and lower taxes would help Chinese consumption and the sustainability of china's economy, (not that it matters but i agree but gov't HATES giving up control- LOL);
      2) when the dollar hits
      "X", then the bubble starts to unravel in China.
      3) alternatively, we get stagflation until central banks are forced to raise rates at which point, here comes another recession.

      From his perspective, its not if, but when.
      I heard him say 2nd half of '10.

      Did you pick up anything different or to the contrary?

      PS- Since he's in HK, it would seen logical that he may have more insight than others.

      PPS- As to timing, GS just sold some RE properties in HK. I think they may be heading for the exits.
      Sounds like its time to stay alert IMHO.

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